Final answer:
John Maynard Keynes was a pivotal figure who transformed macroeconomic theory, promoting an active role for government in stabilizing economies during fluctuations. His approach, known as Keynesian economics, emphasized counter-cyclical spending and taxation. Keynes viewed economics as a technique of thinking, influencing both policy and the philosophical approach to the discipline.
Step-by-step explanation:
John Maynard Keynes, a highly influential British economist, fundamentally changed macroeconomic theory and policy. The central tenets of Keynesian economics revolve around the active role of government during economic fluctuations. Keynes asserted that during financial downturns, the government should increase spending and provide tax breaks to prevent high unemployment rates and stimulate the economy. Conversely, during times of economic growth, the government should reduce spending and increase taxes to control inflation. This approach challenges the classical economic belief in laissez-faire, where the market is self-regulating and requires minimal government intervention.
Keynes introduced these ideas in his seminal work, "The General Theory of Employment, Interest, and Money," arguing that underspending was a key cause of economic depressions. Rather than adhering to strict economic doctrines, Keynes promoted economics as a method of thought, providing an intellectual toolkit to derive appropriate conclusions in varying circumstances. His wisdom suggested that economics is a technique of thinking, not a set of rigid beliefs. Keynesian economics was adopted by many governments, most notably during the Great Depression, when U.S. President Franklin D. Roosevelt applied these principles to revive the American economy.